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How to prevent common pitfalls in business

How to prevent common pitfalls in business

As a company owner, there’s a lot of pressure on you to get things right. When it’s you and you alone who is solely responsible for the success and failure of your venture, it can be incredibly stressful in more difficult times, when things aren’t running as smoothly as you’d like. You’ll need to be proactive and take steps to prevent business from going bad. Here are a number of ways you can go about it.

Consider online and physical security

Keeping your business secure is of the utmost importance as a company owner. Criminals love to target businesses as there’s usually a lot of money to be gained, whether it’s from stealing and selling data, rinsing bank accounts, or breaking in and stealing physical assets such as laptops and equipment. You’ll need to keep yourself safe both online and in person. Follow online security advice- use strong passwords, and be careful with who you trust with these passwords. Stick to one or two very trusted and senior members of staff only. When you’re having your infrastructure built, ensure employees accounts are kept limited and separate from sensitive information. That way, if someone hacks them or steals their login codes they’re not able to access things like bank accounts or sensitive customer data. Use firewalls and good antivirus software to prevent remote hacking, and consider moving all of your systems onto online, encrypted cloud-based servers. Not only will this enable you or your employees to work from anywhere in the world (and the benefits of remote working are now well established) but it will keep your data safe too. When it comes to your office premises, security systems such as CCTV, a burglar alarm and lockable shutters can all help to keep the bad guys out.

Keep your finances in order

Hundreds of thousands of businesses fail each year. Sometimes it’s unfortunate and unavoidable- a bigger company could have made them obsolete or changes in customer demand means there’s not enough call for their products. But in other cases, great companies with huge potential fail because they haven’t managed their finances correctly. Spending too much in the early days and then business not taking off as quickly as imagined can lead to a company falling into debt due to mounting interest rates from their business loans. There are peaks and troughs in profits for most companies throughout the year, for example, most retail stores will experience an increase in sales over public holidays such as Christmas, and then a dip afterwards. Businesses need to plan for these dips, and ensure they have the funds to cover their costs during quieter times. Spend carefully, track everything that comes in and use good accounting software to keep everything in order. Have a contingency fund that can keep things ticking over during quieter times, so you don’t have to close your doors completely.

Follow the law to the letter

Another pitfall that many businesses can come up against is when they’re taken to court. If laws or health and safety are not executed properly, and anyone is mistreated or hurt as a result of your business it can mean bad news for you. Each and every one of your employees needs general health and safety training, and in many cases will need specific training for their job. For some roles, regular training will need to be undertaken to ensure the best standards are being met. When it comes to your products, they’ll need to be fully tested and manufactured to the highest standard to meet product laws and make sure that no one becomes injured because of what you sell. Make sure you have the right insurances in place, that way if the worst does happen and a claim is made against you, you don’t end up out of pocket. Don’t just take the cheapest policies, read the smallprint and make sure you know what you’re protected against.

Think about your exit strategy

It’s always worth having an exit strategy as part of your business plan. This can help you calculate the potential value of your business, are well-prepared to exit when the situation is favourable (such as when market conditions are good) and you have the time and opportunity to develop and train successors to take over from you. An exit strategy doesn’t always have to be implemented when you experience misfortune, however it can also be utilised in this case. If business is going bad, knowing how and when to exit can reduce damage control and prevent you from losing money (or more money). Your strategy will all depend on your individual business, as well as the field you work in. For example, the exit strategy for accountants will be different to those in construction or health. Don’t wait until you’re forced to come up with a plan retrospectively. Know what you’d do to leave from the outset, hopefully you don’t have to end things in a bad situation but when it comes to business you just never know. For this reason, planning and preparation is key.

Keep an eye on your reviews

Your reviews will give a good overview as to how well your company is performing. Most businesses will receive bad reviews from time to time due to overly fussy customers, but if you’re getting constant negative feedback (especially if the same issues keep cropping up) it’s a sure sign of a failing within your company. If it’s a delivery or shipping issue, you might need to change your courier or the business you’re outsourcing your fulfillment to. If it’s a a quality issue, you might need to change your manufacturing process or source your products from a different company. It can also be helpful to read the reviews of your direct competitors, if they’re making mistakes then this can actively help you to put systems in place and avoid making them yourself.

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